Opinion: Tesla is Committing Automotive Suicide
In a single name, Tesla introduced it’s killing the Mannequin S and Mannequin X, has no plans for brand new mass-market fashions, and is pivoting fully to “transportation as a service.” The corporate that revolutionized the auto trade is strolling away from it, not as a result of it failed, however as a result of Elon Musk acquired bored and located new toys.
What Occurred to Tesla Immediately
When requested if Tesla has plans to launch new fashions to handle completely different value segments, VP of Automobile Engineering Lars Moravy gave a telling response:
“It’s important to begin serious about us as shifting to offering transportation as a service greater than the whole addressable marketplace for the bought autos alone..”
Learn that once more. Tesla’s head of auto engineering is telling you to cease considering of Tesla as an organization that sells vehicles.
Musk doubled down:
“I actually assume long-term, the one autos that we’ll make might be autonomous autos.”
He predicted that “in all probability lower than 5 % of miles pushed might be the place someone’s truly driving the automobile themselves sooner or later, perhaps as little as one %.”
After which got here the killing blow: Mannequin S and Mannequin X manufacturing ends subsequent quarter. The Fremont line might be transformed to fabricate Optimus robots as an alternative.
Lastly, in its newest 10k SEC submitting, Tesla formally up to date its mission to “constructing a world of wonderful abundance” – no matter which means.
What Tesla is Left With
Let’s rely Tesla’s present car lineup:
- Mannequin 3 — Profitable (however in decline)
- Mannequin Y — Profitable (however in decline)
- Mannequin S — Being killed
- Mannequin X — Being killed
- Cybertruck — Industrial failure, promoting roughly 20 to 25k/12 months towards 250k capability
- Tesla Semi — Nonetheless not in quantity manufacturing after years of delays
That leaves Tesla with precisely two profitable car fashions. Two. And there are each in decline.
And as an alternative of constructing on that success, increasing into new segments, addressing affordability, competing with the flood of latest EVs from legacy automakers and Chinese language rivals, Tesla is strolling away.
The USD 25,000 Tesla that Musk promised for years? Scrapped.
New fashions to compete with the likes of the Hyundai, Lucid, Rivian, or the wave of reasonably priced Chinese language EVs? Not coming.
Tesla’s reply to every little thing is now the identical: await robotaxis.
The False Alternative
Right here’s what makes this so irritating: Tesla didn’t have to decide on.
The corporate might have spun off its AI and robotics efforts right into a separate entity, name it Tesla AI or no matter, whereas conserving Tesla, the automaker, centered on what it does greatest: constructing and promoting nice electrical autos and accelerating the trade’s transition to electrical transport.
Or it might have completed the reverse: spin off the automotive enterprise and let Musk pursue his AI goals with the mum or dad firm. Both manner, there was no level in letting nice EV packages die.
Tesla might have continued to spend money on electrical autos, leverage its experience in batteries and energy electronics, to speed up EV adoption and stationary vitality storage deployment, and will have licensed “Tesla AI’s” know-how to combine it into its autos.
As a substitute, Tesla is letting a extremely profitable automaker wither so it will probably chase autonomous robots and robotaxis which will or might not work, might or might not get regulatory approval, and will or might not discover a market.
It is a firm that delivered 1.6 million autos final 12 months. That has a world Supercharger community. That has model recognition any automaker would kill for (up till final 12 months). And it’s being sacrificed on the altar of Musk’s subsequent obsession.
The Numbers Do Not Lie
Tesla’s automotive income declined 10 % in 2025. Deliveries fell 9 %. The corporate misplaced its crown because the world’s largest EV maker to BYD.
The response to those issues? To not repair them by giving extra like to its EV packages, however to desert the enterprise fully.
As a substitute of killing Mannequin S and Mannequin X, Tesla might have introduced the nice issues it did with the Cybertruck, comparable to drive-by-wire and its 800V powertrain, to its packages, however it didn’t hassle.
In the meantime, the “future” Tesla is betting on seems like this:
Robotaxi fleet: About 30-60 autos truly working in Austin, regardless of claims of “nicely over 500”
Optimus robots: Zero doing helpful work in factories, by Musk’s personal admission
CyberCab: About to enter manufacturing and not using a steering wheel whereas Tesla nonetheless hasn’t solved autonomy
Tesla is abandoning a enterprise that generated USD 80 billion in automotive income and nearly USD 15 billion in income at its peak for ventures that at the moment generate basically nothing.
Throughout the earnings name, the corporate introduced it would spend a document USD 20 billion in capital expenditure in 2026, and most of it would go into its robotaxi and humanoid robots, in addition to their supporting infrastructure, particularly coaching compute.
In the meantime, Tesla generated lower than USD 6 billion in web revenue (non-GAAP) in 2025 – down 26 % from final 12 months and greater than 50 % from its peak just a few years in the past.
Electrek’s Take
I’ve coated Tesla for over a decade. I watched this firm show that electrical autos might be fascinating, that they might be worthwhile, that they might compete with and beat one of the best that legacy automakers needed to supply.
And now I’m watching it commit suicide.
There’s a model of this story the place Tesla stays the dominant EV maker whereas additionally pursuing AI and autonomy. The place the corporate launches reasonably priced fashions to compete with Chinese language EVs. The place it expands into new segments. The place it makes use of its manufacturing experience and model energy to truly develop its automotive enterprise, and push the trade ahead within the course of, particularly within the US, the place automakers are falling behind the remainder of the world.
Curtis Larimer feedback, “Even when they totally resolve autonomous driving in all situations, the expertise of calling a taxi, ready, having no management over the route it chooses or the place it drops you off, having to take every little thing out of the automobile each time, and lots of extra inconveniences will make this transportation “service” worse than simply proudly owning a automobile. Uber already exists and it hasn’t meaningfully modified automobile possession”.
As a substitute, we get Lars Moravy telling us to consider Tesla as a “transportation as a service” firm. We get Musk saying the one autos Tesla will make are autonomous ones. We get the Mannequin S and X killed to make room for robots that don’t work but.
Tesla might have had each. It selected to have one, and that might result in neither.
That is Musk becoming a member of the favored “as a service” pattern of the elite, who don’t need individuals to personal something and as an alternative have them “subscribe” to as many issues as doable. It’s a miserable future.
RIP Tesla the automaker. You didn’t need to die.
This text is written by Fred Lambert and was first seen on electrek.co.
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